Amazon.com (AMZN) - Get Report is facing a fresh antitrust battle with the European Union as the economic bloc filed formal charges against the online retail giant for alleged unfair business practices.
In a so-called Statement of Objections released Tuesday, the region's top antitrust enforcer said that preliminary findings show Amazon information on third-party sellers that operate on Amazon's platform "are widely available to employees of Amazon's retail business and flow directly into the automated systems of that business."
That, in turn, gives Amazon an unfair leg up on its marketplace sellers when it comes to calibrating retail offers and making other business decisions, particularly with offers on best-selling products across product categories, the commission said, pointing to Amazon marketplace services in France and Germany, its biggest EU markets.
"With e-commerce booming, and Amazon being the leading e-commerce platform, a fair and undistorted access to consumers online is important for all sellers," European Commission Executive Vice President Margrethe Vestager said in a press release.
“We must ensure that dual role platforms with market power, such as Amazon, do not distort competition," she said.
If confirmed, this would infringe Article 102 of the Treaty on the Functioning of the European Union (TFEU) that prohibits the abuse of a dominant market position, according to the European Commission.
Amazon repeatedly has faced regulatory probes into its alleged practices of collecting data on the vendors it hosts on its platform, and then using that data to unfairly compete against them.
The European Commission launched an investigation into Amazon in June 2019, in part to look at how it gathers data from customers and vendors to develop and sell its own products.
Reports emerged this past June that the EU was planning formal antitrust charges against Amazon, and that a European Commission case team had circulated a draft of the charge sheet.
The commission also on Tuesday launched a separate investigation into Amazon practices regarding its “Buy Box” and Prime labels that its says may be leading to preferential treatment of Amazon’s retail business, or of the sellers that use Amazon’s logistics and delivery services.
A decision on whether Amazon broke competition laws is expected next year. If the company is found to be in violation, the commission can force Amazon to change its business practices and fine it as much as 10% of its annual global revenue -- or up to $28 billion, based on 2019 numbers.
The sending of a Statement of Objections does not prejudge the outcome of an investigation. Amazon can challenge any such decision in an EU court.
Alphabet-owned Google (GOOGL) - Get Report was fined more than $9 billion after nearly a decade of EU investigations. Apple (AAPL) - Get Report and Facebook (FB) - Get Report also face early-stage probes.
Shares of Amazon were down 3.05% at $3,047.73 in New York trading on Tuesday.